The integration of ESG issues in community banking: contextual factors and strategic managerial perceptions

The integration of environmental, social and governance (ESG) factors into community banks is still a rather unexplored topic that is important to investigate due to the significant role of these banks in the economic growth of their territories and communities. This study sought to understand the most influential contextual aspects and the strategic implications of ESG integration for a community bank. An exploratory and descriptive approach was adopted by conducting a case study of a cooperative bank that was strongly integrated into its territory. The main results show that the influential contextual factors and strategic managerial perceptions of ESG integration in community banks differ depending on which E, S or G factor is involved. Furthermore, the integration of the social factor is the most critical, considering its leverage effects on the community and the territory served. This paper demonstrates that the advent of green banking can generate a new scenario for community banks that allows them to reevaluate their strategic role in providing new development opportunities.